End of Week Quiz Chapter 8 to 10

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Question #1

A successful advertising campaign may allow competing monopolists to

A sell a greater quantity.

B charge a higher price.

C increase its profits.

D do all of the above.

Question #2

____________ occurs when circumstances have allowed several large firms to have all or most of the sales in an industry.

A An oligopoly

B Collusion

C A cartel

D A monopoly

Question #3

The single most common form of competition in the U.S. is

A perfect competition because it displays product and allocative efficiencies.

B perfect competition among firms with differentiated products.

C oligopolistic competition in a certain market with similar products.

D monopolistic competition among firms with differentiated products.

Question #4

A monopolistically competitive industry does not display ____________ in either the short-run, when firms are making ____________, nor in the long-run, when firms are earning ____________.

A allocative efficiency; profits and losses; negative profits

B productive efficiency; profits and losses; zero profits

C productive and allocative efficiency; profits and losses; zero profits

D productive and allocative efficiency; profits and losses; negative profits

Question #5

If a monopoly or a monopolistic competitor raises their prices, the quantity demanded ____________.

A stays the same

B will expand

C will decline in the short run

D will decline

Question #6

In a monopolistic competitive industry, firms can try to differentiate their products by

A choosing optimal locations from which the product is sold.

B enhancing the intangible aspects of the product.

C creating optimal perceptions of the product.

D enhancing productâ€™s physical aspects and all of the above.

Question #7

The shape of the perceived demand curve for a perfectly competitive firm reflects that firm’s ability to

A choose any combination of price and quantity.

B sell any quantity it wishes at the prevailing market price.

C raise its price without losing all of its customers.

D lose fewer customers than a monopoly that raised its prices.

Question #8

If monopolistic competitors must expect a process of entry and exit like perfectly competitive firms,

A they will wish to cooperate to make decisions about what price to charge.

B they will be unable to earn higher-than-normal profits in the short run.

C they will wish to cooperate to make decisions about what quantity to produce.

D they will be unable to earn higher-than-normal profits in the long run.

Question #9

_______________ law implies ownership over an idea or concept or image

A Patent

B Trademark

C Copyright

D Intellectual property

Question #10

Which of the following denotes the typical shape of the monopolist’s total cost curve?

A higher output levels create the typical downward sloping cost curve

B total costs rise and grow steeper as output rises

C total costs decrease and become flatter as output rises

D total costs are typically constant and are shown by a straight horizontal line

Question #11

Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?

A quantities that can be produced

B natural monopoly

C prices that can be charged

D conditions of entry in a certain industry

Question #12

For a pure monopoly to exist,

A there is a single seller in a particular industry

B there are a few sellers in a given industry

C there are limited sellers in a particular industry

D there is only one seller, therefore no industry

Question #13

If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3,90 per unit, it will produce and sell the sixth unit if its marginal cost is

A $3.90 or less

B $4.00 or less

C $3.40 or less

D $3.50 or less

Question #14

The marginal revenue curve for a monopolist _________ the market demand curve.

A always is the same

B always runs parallel

C always lies beneath

D always rises above

Question #15

Occasionally, _________ may lead to pure monopoly; in other market conditions, they may limit competition _________.

A barriers to entry; to a few oligopoly firms

B barriers to entry; to a natural monopoly

C deregulation; requiring new copyright law

D deregulation; requiring new patent law

Question #16

The US government has registered _________ on behalf of business firms to protect a particularly distinct element each has selected for its ability to aid consumers to easily _________.

A 200,000 trade secrets; create a natural monopoly

B 800,000 trademarks; identify the source of goods

C 200,00 patents; license for use

D 1 million copyright licenses; identify the authors of creative works

Question #17

A natural monopoly occurs when the quantity demanded is _________ the minimum quantity it takes to be at the bottom of the long-run average cost curve.

A a or c above

B less than

C greater than

D equal to

Question #18

Under perfect competition, any profit-maximizing producer faces a market price equal to its

A average costs

B total costs

C marginal costs

D variable costs

Question #19

If a competitive firm experiences a shift in costs of production that decreases marginal costs at all levels of output,

A the firm’s demand curve will also shift to the left.

B producing less at any market price will off-set marginal cost .

C expanding output levels at any given price will be profitable.

D the firm’s marginal cost curve will shift to the left.

Question #20

In the _______ , the perfectly competitive firm will react to profits by _____________________ .

A long run; increasing its production

B short run; reducing its labor inputs

C short run; increasing quality of products

D long run; tailoring their quality controls

Question #21

When a business adopts a strategy of reducing and/or discontinuing production in response to a sustained pattern of losses, it is

A considering capital investments.

B considering opportunity costs.

C preparing to reach its shutdown point.

D preparing to exit operations.

Question #22

Why would a profit-seeking firm need to tailor its decisions about the quantity of labor inputs that it purchases?

A the quantity of labor is the only variable cost choice a profit-seeking firm can make

B to produce the highest profitable quantity of output at the lowest possible marginal cost

C deciding what quantity to produce is one of the major choices a profit-seeking firm makes

D to produce the profit-maximizing quantity of output at the lowest possible average cost

Question #23

The term _______ refers to a firm operating in a perfectly competitive market that must take the prevailing market price for its product.

A price setter

B business entity

C trend setter

D price taker

Question #24

If the price that a firm charges is higher than its ___________ cost of production for that quantity produced, then the firm will earn profits.

A variable

B fixed

C marginal

D average

Question #25

In Sam’s greenhouse operation, labor is the only short term variable input. After completing a cost analysis, if the marginal product of labor is the same for each unit of labor, this will imply that

A as more labor inputs are used, the average product of labor inputs will fall.

B the average product of labor is always equal to the marginal product of labor.

C the average product of labor is always less than the marginal product of labor.

D the average product of labor is always greater that the marginal product of labor.

Question #26

If marginal cost is rising in a competitive firm’s short-run production process and its average variable cost is falling as output is increased, then

A marginal cost is below average fixed cost.

B marginal cost is above average variable cost.

C average fixed cost is constant.

D marginal cost is below average variable cost.

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End of Week Quiz Chapter 8 to 10

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